Spain unlocks €6.9 billion in loans to boost defence sector
96% of allocated funds have been awarded either directly to Spanish defence giant Indra or to other entities connected to it
MADRID – Spain’s Council of Ministers approved €6.890 billion in defence investment loans on Tuesday to “modernise” its military capabilities, with national defence giant Indra the main beneficiary.
The council approved three decree-laws to enable “direct granting of loans to several companies for the industrial development of special modernisation programmes in the land and air sectors.” All loans are granted at a fixed, non-revisable interest rate of 0%, noted a government statement.
Under the current model, the Spain’s industry ministry provides the funds upfront, and companies repay the zero-interest loans over 20 years once products have been delivered to the Ministry of Defence.
These funds will be allocated to 18 “special programmes” as part of Spain’s “Industry and Technology Plan for Security and Defence” announced by Prime Minister Pedro Sánchez in April, set to mobilise around €10.47 billion, and lift Madrid’s military spending to 2% of GDP.
Local reports calculate almost 96% of allocated funds – €6.582 billion – have been directed to Indra or to temporary joint ventures (UTE) with companies which its president Ángel Escribano has either acquired (AERTEC Defence and Aerial Systems); in which Indra is the majority shareholder, such as TESS Defence (51%); or plans to merge with, including EM&E, the company owned by Escribano together with his brother Javier.
The state-owned corporate holding (SEPI) has a 28% stake in Indra.
Urovesa and Santa Barbara Sistemas, subsidiary of US defence giant GDELS, the only companies not linked to Indra, have received €132 million and €176 million, respectively.
“Indra is committed to providing the most advanced solutions required by our Armed Forces and guaranteeing the strategic sovereignty that Spain needs,” said Angel Escribano in a company statement.
Indra will “generate wealth throughout the country through high value-added jobs, an industry that is as self-sufficient as possible, and advanced technology that is entirely national, ” he added.
According to the company’s own calculations, through its national network of SMEs, start-ups and technology centres, Indra is already subcontracting around 77% of Spain’s national industry.
(cp)
